Should I Worry About Market Drops?

Happy New Year! Hopefully 2019 is a better year for the markets.

It's been rough since October, and yet I haven't gotten a single frantic call about how the sky is falling.

In fact, I've received just the opposite - clients reaching out me telling me that they aren't worried because I taught them that market downturns are always temporary.

So if you're a client of The Financial Zen Group, pat yourself on the back for being the calm, educated few instead of the frantic, uneducated masses.

If you're NOT a client, then let me tell you why the last three months are NBD (or maybe even to your advantage).

If you are still in the accumulation phase of your life (i.e. more than 5 years from retiring), then market downturns are an amazing opportunity to buy investments at a discount. Even if you're not saving any more than what you're putting into your 401k, every dollar you put in is getting invested near the bottom.

If you are in the distribution phase of your life (i.e. retired), then market downturns are a nonevent. We know market downturns happen, which is why the money you need for groceries isn't invested in the market. Instead you should have 10-15 years of living expenses set aside in boring (but predictable) bonds. The money you have in the stock market is the money you need for groceries in 10-15 years. And there has never been a time in history (not even the Great Depression) where the markets were down for 15 years.

If you're a client, you knew all that.

If you're not a client, then welcome to the calm and educated club.

DISCLAIMER:  This publication is for educational purposes only and should not be considered financial, tax or legal advice.  These statements have been simplified for illustration purposes.  Consult your financial planner or tax advisor for help with your specific situation.